The British Chambers of Commerce has warned that Brexit uncertainty will leave business investment growth at its lowest level in a decade this year.
The lobby group estimates a 1 per cent fall in investment this year, on the back of a similar fall last year.
Investment fell by 16.6 per cent in the aftermath of the financial crisis in 2009, the Times reports, but this would be the greatest fall since then due to delayed decisions by firms amid EU negotiations.
The Bank of England has previously estimated a 2 per cent increase in investment this year, but has since also cited Brexit uncertainty in revising that estimate to a 2.75 per cent fall.
The BCC warns that net trade will “make a negative contribution to GDP growth over the forecast period, reflecting the lack of clarity on the UK’s future trade arrangements, weaker global growth and continued trade tensions” – despite the fact exports are predicted to grow marginally.
These will be outstripped by import growth of 2 per cent, however.
BCC director general Adam Marshall says: “It is clear that political inaction has already had economic consequences, with many firms hitting the brakes on investment and recruitment decisions…Worse still, some companies have moved investment and growth plans as part of their contingency preparations. Some of this investment may never come back to the UK.”